California Legislature—2015–16 Regular Session

Assembly Bill No. 942

Introduced by Assembly Member Calderon

February 26, 2015

An act to amend Section 2851 of the Public Utilities Code, relating to energy.

LEGISLATIVE COUNSEL’S DIGEST

AB 942, as introduced, Calderon. California Solar Initiative: low-income residential housing.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations, as defined. Decisions of the commission adopted the California Solar Initiative. Existing law requires the commission to undertake certain steps in implementing the California Solar Initiative.

This bill would make a nonsubstantive change to the law requiring the commission to undertake certain steps in implementing the California Solar Initiative.

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 2851 of the Public Utilities Code is
amended to read:

2851.  

(a) In implementing the California Solar Initiative, the
commission shall do all of the following:

(1) (A) The commission shall authorize the award of monetary
incentives for up to the first megawatt of alternating current
generated by solar energy systems that meet the eligibility criteria
established by the Energy Commission pursuant to Chapter 8.8
(commencing with Section 25780) of Division 15 of the Public
Resources Code. The commission shall determine the eligibility
of a solar energy system, as defined in Section 25781 of the Public
Resources Code, to receive monetary incentives until the time the
Energy Commission establishes eligibility criteria pursuant to
Section 25782. Monetary incentives shall not be awarded for solar
energy systems that do not meet the eligibility criteria. The
incentive level authorized by the commission shall decline each
year following implementation of the California Solar Initiative,
at a rate of no less than an average of 7 percent per year, and,
except as provided in subparagraph (B), shall be zero as of
December 31, 2016. The commission shall adopt and publish a
schedule of declining incentive levels no less than 30 days in
advance of the first decline in incentive levels. The commission
may develop incentives based upon the begin delete output of electricity from end delete begin insert end insert
begin insert electricity generated by end insert the system, provided those incentives are
consistent with the declining incentive levels of this paragraph and
the incentives apply to only the first megawatt of electricity
generated by the system.

(B) The incentive level for the installation of a solar energy
system pursuant to Section 2852 shall be zero as of December 31,
2021.

(2) The commission shall adopt a performance-based incentive
program so that by January 1, 2008, 100 percent of incentives for
solar energy systems of 100 kilowatts or greater and at least 50
percent of incentives for solar energy systems of 30 kilowatts or
greater are earned based on the actual electrical output of the solar
energy systems. The commission shall encourage, and may require,
performance-based incentives for solar energy systems of less than
30 kilowatts. Performance-based incentives shall decline at a rate
of no less than an average of 7 percent per year. In developing the
performance-based incentives, the commission may:

(A) Apply performance-based incentives only to customer
classes designated by the commission.

(B) Design the performance-based incentives so that customers
may receive a higher level of incentives than under incentives
based on installed electrical capacity.

(C) Develop financing options that help offset the installation
costs of the solar energy system, provided that this financing is
ultimately repaid in full by the consumer or through the application
of the performance-based rebates.

(3) By January 1, 2008, the commission, in consultation with
the Energy Commission, shall require reasonable and cost-effective
energy efficiency improvements in existing buildings as a condition
of providing incentives for eligible solar energy systems, with
appropriate exemptions or limitations to accommodate the limited
financial resources of low-income residential housing.

(4) Notwithstanding subdivision (g) of Section 2827, the
commission may develop a time-variant tariff that creates the
maximum incentive for ratepayers to install solar energy systems
so that the system’s peak electricity production coincides with
California’s peak electricity demands and that ensures that
ratepayers receive due value for their contribution to the purchase
of solar energy systems and customers with solar energy systems
continue to have an incentive to use electricity efficiently. In
developing the time-variant tariff, the commission may exclude
customers participating in the tariff from the rate cap for residential
customers for existing baseline quantities or usage by those
customers of up to 130 percent of existing baseline quantities, as
required by Section 739.9. Nothing in this paragraph authorizes
the commission to require time-variant pricing for ratepayers
without a solar energy system.

(b) Notwithstanding subdivision (a), in implementing the
California Solar Initiative, the commission may authorize the award
of monetary incentives for solar thermal and solar water heating
devices, in a total amount up to one hundred million eight hundred
thousand dollars ($100,800,000).

(c) (1) In implementing the California Solar Initiative, the
commission shall not allocate more than fifty million dollars
($50,000,000) to research, development, and demonstration that
explores solar technologies and other distributed generation
technologies that employ or could employ solar energy for
generation or storage of electricity or to offset natural gas usage.
Any program that allocates additional moneys to research,
development, and demonstration shall be developed in
collaboration with the Energy Commission to ensure there is no
duplication of efforts, and adopted by the commission through a
rulemaking or other appropriate public proceeding. Any grant
awarded by the commission for research, development, and
demonstration shall be approved by the full commission at a public
meeting. This subdivision does not prohibit the commission from
continuing to allocate moneys to research, development, and
demonstration pursuant to the self-generation incentive program
for distributed generation resources originally established pursuant
to Chapter 329 of the Statutes of 2000, as modified pursuant to
Section 379.6.

(2) The Legislature finds and declares that a program that
provides a stable source of monetary incentives for eligible solar
energy systems will encourage private investment sufficient to
make solar technologies cost effective.

(3) On or before June 30, 2009, and by June 30th of every year
thereafter, the commission shall submit to the Legislature an
assessment of the success of the California Solar Initiative program.
That assessment shall include the number of residential and
commercial sites that have installed solar thermal devices for which
an award was made pursuant to subdivision (b) and the dollar value
of the award, the number of residential and commercial sites that
have installed solar energy systems, the electrical generating
capacity of the installed solar energy systems, the cost of the
program, total electrical system benefits, including the effect on
electrical service rates, environmental benefits, how the program
affects the operation and reliability of the electrical grid, how the
program has affected peak demand for electricity, the progress
made toward reaching the goals of the program, whether the
program is on schedule to meet the program goals, and
recommendations for improving the program to meet its goals. If
the commission allocates additional moneys to research,
development, and demonstration that explores solar technologies
and other distributed generation technologies pursuant to paragraph
(1), the commission shall include in the assessment submitted to
the Legislature, a description of the program, a summary of each
award made or project funded pursuant to the program, including
the intended purposes to be achieved by the particular award or
project, and the results of each award or project.

(d) (1) The commission shall not impose any charge upon the
consumption of natural gas, or upon natural gas ratepayers, to fund
the California Solar Initiative.

(2) Notwithstanding any other provision of law, any charge
imposed to fund the program adopted and implemented pursuant
to this section shall be imposed upon all customers not participating
in the California Alternate Rates for Energy (CARE) or family
electric rate assistance (FERA) programs, including those
residential customers subject to the rate limitation specified in
Section 739.9 for existing baseline quantities or usage up to 130
percent of existing baseline quantities of electricity.

(3) The costs of the program adopted and implemented pursuant
to this section shall not be recovered from customers participating
in the California Alternate Rates for Energy or CARE program
established pursuant to Section 739.1, except to the extent that
program costs are recovered out of the nonbypassable system
benefits charge authorized pursuant to Section 399.8.

(e) Except as provided in subdivision (f), in implementing the
California Solar Initiative, the commission shall ensure that the
total cost over the duration of the program does not exceed three
billion five hundred fifty million eight hundred thousand dollars
($3,550,800,000). Except as provided in subdivision (f), financial
components of the California Solar Initiative shall consist of the
following:

(1) Programs under the supervision of the commission funded
by charges collected from customers of San Diego Gas and Electric
Company, Southern California Edison Company, and Pacific Gas
and Electric Company. Except as provided in subdivision (f), the
total cost over the duration of these programs shall not exceed two
billion three hundred sixty-six million eight hundred thousand
dollars ($2,366,800,000) and includes moneys collected directly
into a tracking account for support of the California Solar Initiative.

(2) Programs adopted, implemented, and financed in the amount
of seven hundred eighty-four million dollars ($784,000,000), by
charges collected by local publicly owned electric utilities pursuant
to Section 2854. Nothing in this subdivision shall give the
commission power and jurisdiction with respect to a local publicly
owned electric utility or its customers.

(3) Programs for the installation of solar energy systems on new
construction (New Solar Homes Partnership Program),
administered by the Energy Commission, and funded by charges
in the amount of four hundred million dollars ($400,000,000),
collected from customers of San Diego Gas and Electric Company,
Southern California Edison Company, and Pacific Gas and Electric
Company. If the commission is notified by the Energy Commission
that funding available pursuant to Section 25751 of the Public
Resources Code for the New Solar Homes Partnership Program
and any other funding for the purposes of this paragraph have been
exhausted, the commission may require an electrical corporation
to continue administration of the program pursuant to the guidelines
established for the program by the Energy Commission, until the
funding limit authorized by this paragraph has been reached. The
commission, in consultation with the Energy Commission, shall
supervise the administration of the continuation of the New Solar
Homes Partnership Program by an electrical corporation. An
electrical corporation may elect to have a third party, including
the Energy Commission, administer the utility’s continuation of
the New Solar Homes Partnership Program. After the exhaustion
of funds, the Energy Commission shall notify the Joint Legislative
Budget Committee 30 days prior to the continuation of the
program.

(4) The changes made to this subdivision by Chapter 39 of the
Statutes of 2012 do not authorize the levy of a charge or any
increase in the amount collected pursuant to any existing charge,
nor do the changes add to, or detract from, the commission’s
existing authority to levy or increase charges.

(f) Upon the expenditure or reservation in any electrical
corporation’s service territory of the amount specified in paragraph
(1) of subdivision (e) for low-income residential housing programs
pursuant to subdivision (c) of Section 2852, the commission shall
authorize the continued collection of the charge for the purposes
of Section 2852. The commission shall ensure that the total amount
collected pursuant to this subdivision does not exceed one hundred
eight million dollars ($108,000,000). Upon approval by the
commission, an electrical corporation may use amounts collected
pursuant to subdivision (e) for purposes of funding the general
market portion of the California Solar Initiative, that remain
unspent and unencumbered after December 31, 2016, to reduce
the electrical corporation’s portion of the total amount collected
pursuant to this subdivision.